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Iceland Political Leader Calls For Debt
Moratorium As Government Crumbles

By Webster G. Tarpley
10-7-9

REYKJAVIK, Iceland -- A
leading member of the Icelandic parliament called Monday night for the
country to declare a debt moratorium and stop attempting to pay the $6
billion which the British and Netherlands governments are seeking to extort
from Iceland with the help of the International Monetary Fund and the European
Commission in Brussels. This dramatic call was issued by Birgitta Jónsdóttir,
the chairman of the parliamentary faction of The Movement in the Icelandic
parliament, the Althing. Birgitta Jónsdóttir was speaking
during a special session of the Althing called to address the rapidly deteriorating
economic and financial position of Iceland, one year after the collapse
of the three hot-money offshore banks, Landsbanki, Kaupthing, and Glitnir.

In her remarks, Birgitta Jónsdóttir observed
that Iceland is already technically bankrupt, and ought to cease payment.
She also pointed to the hostility to Iceland of the IMF and EU. The current
prime minister, Jóhanna Sigurðardóttir, who leads a moribund
coalition of Social Democrats and Left Greens, had attempted to justify
her policy of financial appeasement of the British and Dutch. London and
The Hague are demanding $6 billion in restitution for losses incurred by
private Icelandic bankers operating in their countries as Icesave, even
though the Icelandic government had never guaranteed these operations,
and even though British and Dutch regulators were deeply implicated in
the Icesave debacle, which came in the wake of the Lehman Brothers bankruptcy.

The sum demanded by the British and the Dutch from Iceland
in an operation spearheaded by the widely hated UK Prime Minister Gordon
Brown would amount to about half of the yearly Gross Domestic Product of
Iceland, a country with about 330,000 inhabitants. If the Anglo-Dutch were
attempting to perform a proprortional extortion on the United States, they
would be demanding about $8 trillion . The British and Dutch are also determined
to collect at least 5.5% compound interest, meaning that Iceland's obligation
would grow over time, even if substantial payments were made. If the politically
desperate Brown and his Dutch retainer Balkenende get their way, Icesave
will turn into Iceslave ­ a future of poverty, unemployment, depopulation,
and national collapse for Iceland, which could never pay the sums being
demanded.

In a related development, Icelandic Health Minister Ogmundur
Jonasson, a highly respected leader of the Left Green Party, resigned from
the coalition government in protest against the economic policies being
pursued. Specifically, Ogmundur Jonasson stated in interviews that he could
not in conscience support the Icesave sellout, as the prime minister was
demanding. Ogmundur Jonasson is widely regarded as a possible candidate
for prime minister. His resignation is considered the de facto start of
a government crisis likely to lead to the fall of the current coalition,
perhaps as early as mid-October.

Birgitta Jónsdóttir's The Movement faction
is the product of a mass strike upsurge which gripped Iceland from October
2008 to January 2009, with frequent large-scale demonstrations against
the previous right-wing coalition government, which had imposed the monetarist
de-regulation of the Icelandic banking system, leading to the banking crisis
of last autumn. Birgitta Jónsdóttir and her associates were
originally elected as part of a larger group called the Civic Movement,
from which they split when the Civic Movement took a course of opportunism.

Birgitta Jónsdóttir has now placed the
question of a debt moratorium squarely on the international agenda. Her
courageous move shows that small countries can move world history by providing
leadership for humanity in times of crisis when existing institutions are
increasingly paralyzed and corrupt. In recent months, political forces
in the Philippines and Sri Lanka had raised the question of debt moratoria,
as had the leaders of UNCTAD. With the news coming from Iceland, the formation
of an international debtors' cartel to confront London, Wall Street, and
the IMF has suddenly become a real possibility.

The following is a report of Birgitta Jónsdóttir's
statement from an Icelandic website.

The highlighted reference is to skuldastöðvun,
or debt stop, i.e. debt moratorium.